+70 K
Employees
Achieving Structural Cost Reduction Through Design-to-Value in Tobacco Equipment Investments
A leading international tobacco company seeking to accelerate the transition toward reduced-risk products while optimizing equipment investments. Partnering with EFESO, the company deployed a Design-to-Value approach to eliminate redundancies, simplify equipment design, and strengthen collaboration with its OEM partner.
Industry: Consumer Goods and Luxury
Our Client
A global tobacco and nicotine products company with a significant international presence, operating large-scale manufacturing networks across multiple regions and leading the transition toward reduced-risk product categories.
$30 B
Net revenue
+180
Markets worldwide
The Challenge
The company faced increasing pressure to control costs while supporting its strategic transition toward reduced-risk products.
- Margin pressure: Need to improve cost competitiveness in a challenging market environment.
- Complex equipment cost structures: Existing equipment designs contained redundancies and optimization opportunities.
- Limited transparency during supplier negotiations: Procurement teams required fact-based cost insights to challenge suppliers effectively.
- Need for sustainable savings: The organization sought structural cost reduction rather than one-off cost-cutting initiatives.
Real Results Achieved Together
The Design-to-Value initiative enabled the company to reduce equipment-related costs, improve supplier collaboration, and establish a sustainable approach to cost optimization that supports long-term competitiveness.
26%
Average CapEx savings achieved considering feasibility, implementation plans, and machine configurations worldwide
30%
Additional cost reduction achieved for packing, installation, and commissioning activities
Transformation Impact
- Reduced equipment cost structures through simplification and value-based design decisions.
- Strengthened procurement negotiations through fact-based cost transparency.
- Established a structured collaboration model with OEM partners to continuously identify savings opportunities.
- Built a repeatable Design-to-Value capability that supports long-term cost control and margin protection.
Our Approach
EFESO deployed a Design-to-Value methodology to reduce the gap between customer requirements and OEM solutions while identifying opportunities across the OEM value chain.
1. Technical and Economic Baseline Definition
- Established the technical and economic baseline for current equipment solutions.
2. Opportunity Identification and Assessment
- Generated and assessed improvement opportunities.
- Evaluated implementation risks, feasibility, CapEx savings, and implementation timelines.
3. Design-to-Value Cost Modeling
- Built the future-state Design-to-Value cost model.
- Qualified opportunities by cost category and estimated savings based on deployment volumes.
4. Implementation Planning
- Developed an implementation plan for identified opportunities.
- Supported the establishment of a more collaborative and structured OEM relationship.
